Question 1

A customer's promise to pay in the future for services or goods sold is called a(n):

Accepted Answer

A) Accounts Receivable. 
B) Accounts Payable. 
C) Unearned Revenue. 
D) Notes Payable. 
A) Accounts Receivable. 
B) Accounts Payable. 
C) Unearned Revenue. 
D) Notes Payable.

Question 2

A business makes a cash payment of $12,000 to a creditor. Which of the following accounts will be credited?

Accepted Answer

A) Cash 
B) Accounts payable 
C) Bank 
D) Accounts receivable 
A) Cash 
B) Accounts payable 
C) Bank 
D) Accounts receivable

Question 3

The first step in the journalizing and posting process is to:

Accepted Answer

A) post the accounts to the ledger. 
B) identify each account involved and its type. 
C) determine whether each account is increased or decreased. 
D) record the transaction in the journal, including a brief explanation. 
A) post the accounts to the ledger. 
B) identify each account involved and its type. 
C) determine whether each account is increased or decreased. 
D) record the transaction in the journal, including a brief explanation.

Question 4

A business renders services to its customer for $50,000 on account. Provide the journal entry (debits first, credits second.)

Accepted Answer

@#IMG-DLM& Performed

Question 5

The normal balance of an account is the increase side of the account.

Accepted Answer

A) True 
 B)False

Question 6

The process of transferring data from the ledger to the journal is called posting.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following details is provided in a typical chart of accounts?

Accepted Answer

A) account balance 
B) account number 
C) dates of transactions 
D) transaction amounts 
A) account balance 
B) account number 
C) dates of transactions 
D) transaction amounts

Question 8

Which of the following sequences is the normal sequence of flow of accounting data?

Accepted Answer

A) Ledger → Journal → Source document 
B) Journal → Source document → Ledger 
C) Source document → Journal → Ledger 
D) Source document → Ledger → Journal 
A) Ledger → Journal → Source document 
B) Journal → Source document → Ledger 
C) Source document → Journal → Ledger 
D) Source document → Ledger → Journal

Question 9

Nuptial Inc. paid the rent for the current month in cash. Which of the following account titles will be debited?

Accepted Answer

A) Prepaid rent 
B) Rent payable 
C) Rent revenue 
D) Rent expense 
A) Prepaid rent 
B) Rent payable 
C) Rent revenue 
D) Rent expense

Question 10

A business purchases equipment by paying $8,000 in cash and issuing a note payable of $12,000. Which of the following occurs?

Accepted Answer

A) Cash is credited for $8,000; Equipment is credited for $20,000; and Notes Payable is debited for $12,000. 
B) Cash is credited for $8,000; Equipment is debited for $20,000; and Notes Payable is credited for $12,000. 
C) Cash is debited for $8,000; Equipment is debited for $12,000; and Notes Payable is credited for $20,000. 
D) Cash is debited for $8,000; Equipment is credited for $12,000; and Notes Payable is debited for $4,000. 
A) Cash is credited for $8,000; Equipment is credited for $20,000; and Notes Payable is debited for $12,000. 
B) Cash is credited for $8,000; Equipment is debited for $20,000; and Notes Payable is credited for $12,000. 
C) Cash is debited for $8,000; Equipment is debited for $12,000; and Notes Payable is credited for $20,000. 
D) Cash is debited for $8,000; Equipment is credited for $12,000; and Notes Payable is debited for $4,000.

Question 11

Mitchell Florists reported assets of $1,000 and equity of $350. What is Mitchell's debt ratio?

Accepted Answer

A) 65% 
B) 35% 
C) 100% 
D) 70% 
A) 65% 
B) 35% 
C) 100% 
D) 70%

Question 12

Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?

Accepted Answer

A) source document 
B) journal 
C) ledger 
D) trial balance 
A) source document 
B) journal 
C) ledger 
D) trial balance

Question 13

Which of the following statements is true of a trial balance?

Accepted Answer

A) A trial balance has the same format as a balance sheet. 
B) A trial balance presents data in debit and credit format. 
C) A trial balance shows total amounts of assets, liabilities, but not equity. 
D) A trial balance is prepared after the balance sheet. 
A) A trial balance has the same format as a balance sheet. 
B) A trial balance presents data in debit and credit format. 
C) A trial balance shows total amounts of assets, liabilities, but not equity. 
D) A trial balance is prepared after the balance sheet.

Question 14

A journal entry under the double-entry system includes both debit and credit amounts.

Accepted Answer

A) True 
 B)False

Question 15

After initially recording a transaction, the data is then transferred to the:

Accepted Answer

A) chart of accounts. 
B) ledger. 
C) trial balance. 
D) journal. 
A) chart of accounts. 
B) ledger. 
C) trial balance. 
D) journal.

Question 16

Which of the following is the fifth and last step in the journalizing and posting process?

Accepted Answer

A) posting the accounts to the ledger 
B) identifying each account affected and its type 
C) determining whether the accounting equation is in balance 
D) determining whether each account has increased or decreased 
A) posting the accounts to the ledger 
B) identifying each account affected and its type 
C) determining whether the accounting equation is in balance 
D) determining whether each account has increased or decreased

Question 17

A journal entry for a $250 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $520 and a credit to Cash for $250. Which of the following statements correctly states the effect of the error on the trial balance?

Accepted Answer

A) The sum of the credits will exceed the sum of the debits by $270. 
B) The sum of the debits will exceed the sum of the credits by $250. 
C) The sum of the debits will exceed the sum of the credits by $270. 
D) The sum of the debits will exceed the sum of the credits by $520. 
A) The sum of the credits will exceed the sum of the debits by $270. 
B) The sum of the debits will exceed the sum of the credits by $250. 
C) The sum of the debits will exceed the sum of the credits by $270. 
D) The sum of the debits will exceed the sum of the credits by $520.

Question 18

Source documents provide the evidence and data for accounting transactions.

Accepted Answer

A) True 
 B)False

Question 19

A business renders services to a customer for $26,000 on account. Which of the following accounts will be credited?

Accepted Answer

A) Cash 
B) Accounts Receivable 
C) Service Revenue 
D) Bank 
A) Cash 
B) Accounts Receivable 
C) Service Revenue 
D) Bank

Question 20

Which of the following accounts decreases with a credit?

Accepted Answer

A) Cash 
B) Smith, Capital 
C) Accounts Payable 
D) Notes Payable 
A) Cash 
B) Smith, Capital 
C) Accounts Payable 
D) Notes Payable

Exam 2: Recording Business Transactions

A customer's promise to pay in the future for services or goods sold is called a(n):

A business makes a cash payment of $12,000 to a creditor. Which of the following accounts will be credited?

The first step in the journalizing and posting process is to:

A business renders services to its customer for $50,000 on account. Provide the journal entry (debits first, credits second.)

The normal balance of an account is the increase side of the account.

The process of transferring data from the ledger to the journal is called posting.

Which of the following details is provided in a typical chart of accounts?

Which of the following sequences is the normal sequence of flow of accounting data?

Nuptial Inc. paid the rent for the current month in cash. Which of the following account titles will be debited?

A business purchases equipment by paying $8,000 in cash and issuing a note payable of $12,000. Which of the following occurs?

Mitchell Florists reported assets of $1,000 and equity of $350. What is Mitchell's debt ratio?

Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?

Which of the following statements is true of a trial balance?

A journal entry under the double-entry system includes both debit and credit amounts.

After initially recording a transaction, the data is then transferred to the:

Which of the following is the fifth and last step in the journalizing and posting process?

A journal entry for a $250 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $520 and a credit to Cash for $250. Which of the following statements correctly states the effect of the error on the trial balance?

Source documents provide the evidence and data for accounting transactions.

A business renders services to a customer for $26,000 on account. Which of the following accounts will be credited?

Which of the following accounts decreases with a credit?

Accounting and the Business Environment

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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